Corporate Integrity Project

NLPC seeks to promote integrity in corporate governance, including honesty and fair play in relationships with shareholders, employees, business partners and customers. In doing so, NLPC places special emphasis on:

* Asserting that the social responsibility of the corporation is to defend and advance the interests of the people who own the company, the shareholders. True responsibility is fidelity to one’s own mission, not someone else’s, or someone else’s political agenda.

* Exposing the seeking of influence on public officials by corporations, which is the inevitable result of high levels of government spending and intervention in the marketplace.

* Combating practices that undermine the free enterprise system, including philanthropic giving to groups hostile to a free economy.

But it is very hard to trace these subsidies. Vague statements about “tax credits” and “mandates” give no hint of the magnitude of returns that these subsidies provide to crony windmillers. Indeed, in the Carnahan Special Report, we had to burrow into financial statements of a foreign company and its subsidiary to understand where all the money was going. The principal information was buried in an arcane note to these financial statements.

I had heard that Warren Buffett was a fan of green energy, so when an associate of mine accidentally left a copy of Berkshire Hathaway Inc.’s 2013 Annual Report on my desk a few weeks ago, I … Read More ➡

Further investigation finds that NHTSA has received many additional complaints for newer model GM trucks that appear to be afflicted with the same defect.

A search of NHTSA’s website found 112 complaints of corroded brake lines for model year 2006 Chevy Silverados and GMC Sierras. It stands to reason that there are many more complaints for model years 2004 and 2005. In fact, I counted 240 complaints for corroded brake lines for the 2004 Chevy Silverado before calling it quits and realizing that there are more than enough documented cases to warrant an … Read More ➡

Today, I sent this letter to David Friedman (in photo), Acting Administrator of the National Highway Traffic Safety Administration (NHTSA):

On March 30, 2010 NHTSA’s Office of Defect Investigations opened Preliminary Investigation PE10010, into corrosion-related brake line failures in General Motors full-size pickups made between 1999 and 2003. In January 2011, that investigation was upgraded to ODI Engineering Analysis EA11001, which in part appears to determine if corrosion-related brake line failures were a General Motors-specific issue or industry-wide. The “Engineering Analysis” investigation remains open to this day after over three years, making it NHTSA’s longest-running open investigation, and the second longest investigation in its history.

In response to media coverage of our recent letter to General Motors’ CEO Mary Barra calling for the recall of full-size trucks made from 1999 until 2003 for brake line corrosion, GM spokesman Alan Adler told the Detroit News that “brake line wear … Read More ➡

Washington’s metaphorical “revolving door” keeps on spinning. A recent case involving a former Air Force procurement official is at the center of a high-stakes dispute over the launching of rockets into space, and the huge contracts that go with them.

From March 2011 to January of this year, Roger “Scott” Correll (in photo) was the official at the Pentagon responsible for procuring launch services from private companies. One of his last official acts before his “retirement” in January was to oversee a deal with a company called United Launch Alliance (ULA) for a whopping 36 future launches. ULA is a joint venture of Boeing and Lockheed.

This month, Correll popped up with a new job with Aerojet Rocketdyne, which just happens to supply rocket engines to ULA. His title is Vice President for Government Acquisition and Policy, seemingly more than befitting of his role.

GM’s initial response to our request yesterday for a recall of vehicles with a brake corrosion problem is completely unacceptable. It was contained in a Detroit News article about our call for the carmaker to recall 6 million pickups and SUVs that are the subject of an open investigation by the National Highway Traffic Safety Administration (NHTSA).

GM spokesman Alan Adler, in photo, claimed that the brake corrosion problem is industry-wide, and suggested it was a normal wear-and-tear issue. He told the News:

The trucks in question are long out of factory warranty and owners manuals urge customers to have their brake lines inspected the same way brake pads need replacement for wear. In fact, more than 20 states require brake-line inspections at one- or two-year intervals or when stopped for a violation.

Adler is the same GM spokesman who made outrageous and inaccurate claims when the ignition switch … Read More ➡

Here’s the text of a letter I sent today to GM CEO Mary Barra. As I indicate, we welcomed her affirmative response to our request last month for a recall of a separate set of vehicles with a different problem.

Dear Ms. Barra:

We ask General Motors (the Company) to recall model years 1999 through 2003 for the following vehicles: Chevrolet Avalanche, Chevrolet Silverado, Chevrolet Suburban, GMC Sierra, GMC Tahoe and GMC Yukon.

These six million pickups and SUVs endanger the lives and safety of their owners due to a loss of braking related to brake line corrosion.

According to an ongoing investigation by the National Highway Traffic Safety Administration (NHTSA), it has received 890 complaints of brake line corrosion involving 13 crashes and two injuries. From the summary:

In approximately 25 percent of the complaints, the brake pipe failure has allegedly occurred suddenly, with no warning to the driver

It looks like there is yet another problem with GM vehicles that has been left unresolved. Chevy Silverados and other GM vehicles are being investigated for brake line corrosion by the National Highway Traffic Safety Administration (NHTSA). NHTSA reports 890 complaints for brake failure resulting from “brake pipe corrosion.”

Following is an excerpt from the NHTSA website regarding the investigation:

The Office of Defects Investigation (ODI) received Defect Petition DP10-003 on March 2, 2010, requesting the investigation of model year (MY) 2003 Chevrolet Silverado 2500HD 4WD pickup trucks for corrosion failures of the vehicle brake lines. DP10-003 was granted and on March 30, 2010, Preliminary Evaluation PE10-010 was opened on more than six million model year 1999 through 2003 light trucks and sport utility vehicles manufactured and sold by General Motors Corporation (GM)…

…Of the 890 total complaints for brake pipe corrosion identified, 761 were located in Salt Belt states

As Duke wants to recover $1.5 million in costs related to the plant, the state office that advocates for its customers – the Office of the Utility Consumer Counselor – wants IURC to more closely scrutinize why Edwardsport’s operation has been such a miserable failure. The much-delayed and fought-over plant had a $1.4 billion cost overrun and as a result is adding an average 16 percent increase to Hoosier State customers’ electric bills.

“The ratepayers of Duke Energy should not be mandated to bear the risks and most of the costs of this boondoggle,” said Kerwin Olson, executive director of Citizens Action Coalition, to … Read More ➡

General Motors reported lackluster first quarter earnings’ results as the company took a $1.3 billion charge related to recalls. Most of the expenses for the approximately 7 million vehicles recalled, however, were not actually incurred during the first quarter.

In addition, the $1.3 billion figure is far lower than what the recall will cost GM. The power steering recall alone of about 1.5 million vehicles (which was prompted by NLPC’s exposure of the recall delay) is likely to cost more than that. The estimated cost for replacement of power steering columns is in the area of $1,300 per unit, bringing the total for this single recall to roughly $2 billion. That doesn’t include loaner cars.

There will also be legal costs and settlements which are likely to measure in the billions of dollars. Regardless of the extend of what the total costs of GM’s recent recalls will be, … Read More ➡

General Motors still has many questions to answer regarding the recall scandal that saw at least 13 lives lost in accidents involving vehicles with deadly ignition switch defects. GM waited over 10 years to recall the defective vehicles. The company now needs to answer for a seeming lack of compassion for the victims. GM initially blamed drivers of defective vehicles involved in fatal crashes by falsely implying that all of the accidents occurred while driving off-road.

In February of this year, when news of the GM ignition switch recall surfaced, the claim from GM was that all of the crashes caused by the defective switches “occurred off-road and at high speeds.” Here’s the full explanation as reported by the NY Times:

General Motors is recalling about 619,000 small cars in the United States because either a heavy key ring or a “jarring event” such as running off the road